Environment and Planning A: Economy and Space

This author offers a circumspect appraisal of the recent controversies surrounding an ‘institutional turn’ in economic geography and urban and regional studies. He contends that, although the prevailing institutionalist perspectives undoubtedly yield many welcome innovations and useful departures, they are also beset by certain conceptual difficulties. These include, first, a thin political economy most discernible in the failure to appreciate fully the crucial role of the state in shaping the urban – regional process, and a related weakness in examining the asymmetries of power which enframe the governance of space economies. Second, there is a danger of drifting towards a soft institutionalism: a tautological trap that could invite researchers and policymakers mistakenly to envisage the presence or otherwise of a regional ‘institutional thickness’ or a local ‘social capital’ as an adequate explanation of uneven economic development. It is then contended that one relatively mature but continually evolving institutionalist political – economic framework, the Regulation Approach, might help to redress these deficits and to illuminate further our understanding of urban – regional economic change. Recent contributions examining the shifting geographies of accumulation and the rescaling of regulation are viewed to be particularly germane in this regard.

The authors consider the insights into the concept of institutional thickness provided by the industrial cluster located in southern England commonly referred to as ‘Motor Sport Valley’. It is argued that, although Amin and Thrift's original formulation of the concept of institutional thickness was comprehensive in scope, subsequent debate has focused around a somewhat restricted definition—essentially that of overt regionally based public, or quasi-public, institutions. The success of Motor Sport Valley in the absence of such infrastructure points to other sources of institutional strength and highlights the fact that all economic systems are constituted and mediated through a variety of types of institutional structure. The crucial issue when considering economic development, therefore, is not whether economically successful regions contain sources of institutional thickness, but rather the precise nature of the institutions in the area (and those influencing it from the outside) and their relationship with economic growth.

In recent debates on the regulation and governance of contemporary capitalism and its territorial form, there is an emerging consensus that successful economic development is contingent on a movement away from the nation-state and policy interventions at the national scale toward subnational institutional frameworks and supports. In effect, both an ‘institutional turn’ and a ‘scalar turn’ appear to be occurring, through which the heterogeneity of economic growth may be explored. The author scrutinises these claims by examining what is becoming known as ‘new regionalist’ orthodoxy in economic development. This orthodoxy is particularly powerful because its concerns for resolving economic and democratic deficit by harnessing the regional scale are supported by academics, politicians, and policymakers alike. Focusing on England's Regional Development Agencies (RDAs), a radical initiative in regional economic governance, the author argues for a need to rethink the nation-state and the processes through which its intervention is being scaled. RDAs have been given a remit to enhance economic and social development, but rather than their providing decentralised ‘partnerships for prosperity’, a number of contradictions and tensions are revealed. These indicate that England's own brand of new regionalism is heavily steered by political fiat and central government dictate. To inform new regionalist debates, the author consequently argues that a new (regional) scale of state power is emerging and RDAs are forming part of a political strategy aimed at rescaling, instead of resolving, an economic and democratic deficit. The author concludes by calling for a closer engagement in political – economic geography between state theory, crisis theory, and the scaling of state power and suggests a need to formulate a fourth-cut theory of crisis.

The author distinguishes and comments on three different forms of the institutional turn: thematic, methodological, and ontological. He argues that there is a wide range of institutional turns that have been undertaken for quite different theoretical, empirical, and policy-related reasons; and suggests that the returns from any given institutional turn are by no means guaranteed to be positive. The different senses in which ‘institutions matter’ are explored and the need to contextualize the institutional turn, both at more macro and at more microlevels, is also emphasized. One way of undertaking this contextualization is through the ‘strategic – relational approach’ with its concern with both the structural and the strategic dimensions of a contextualized institutional analysis. As well as presenting the approach in general terms, the author also illustrates its relevance to the spatiotemporal dimensions of institutional analysis. Eight broad conclusions about the institutional turn are presented.

In conjunction with the equilibrium model and reference states developed in paper 1 we examine, over the period 2000 – 20, the effect of new roads and highway capacity changes, applied with and without road pricing, on vehicle emissions and economic (user) benefits. In particular, we quantify the elasticity effects on these outputs. By unifying the treatment of emission and economic benefits, we have confirmed that those conclusions of the 1994 report of the Standing Advisory Committee on Trunk Road Assessment relating to the effect of generated traffic on user benefits may be extended to the case of emissions. Specifically, we have shown both theoretically and numerically that, in congested conditions, elasticity effects may significantly undermine the emission benefits from new and expanded roads. With regard to both components of benefit we have drawn particular attention to the contribution of the off-peak period. For demand elasticities as low as −0.25 we also show that, compared with their evaluation under free use, the emission benefits derived from a road scheme may be significantly reduced, and user benefits moderately reduced, under a regime of congestion pricing. We finally address Foster's contention that the inclusion of induced traffic in road investment appraisal may improve the case for building and improving roads to a higher capacity. We discuss the theoretical conditions under which this may occur but suggest that these are unlikely to hold in practice.

The authors review evidence on the interaction between consumer response and urban design. They present empirical results from research undertaken in Belfast, in which a variety of techniques, including transportation modelling, hedonic analysis, a household survey, and stated-preference modelling, were used. Theory relating to density is discussed and applied to an inner-city redevelopment scheme. The evidence from the stated-preference analysis offers a tool which can inform not only policies, but also the promotion of sustainable development in viable locations, consistent with the business goals of property developers. The same tool can also help identify areas where intensification of land use should not be promoted. Further research developments are considered, with particular emphasis on future urban policies.

The US department store industry has undergone a recent round of strategic acquisition-based portfolio restructuring. The author analyses one such acquisition, studying how its geography was restructured in the premerger stage to conform to the Federal Trade Commission's (FTC's) ‘fix-it-first’ policy and to improve the strategic fit of the transaction. He then investigates evidence, and analyses the effects, of a new era of stricter FTC enforcement, where divestiture may no longer be sufficient in cases of horizontal market overlap. Fundamentally, the author considers the nature of ‘real regulation’ in action, as rules partially dictate investment decisions.

Regions form one of the fundamental categories of geographical thought and analysis and yet are far from being fixed spatial entities. Analysis of the East Midlands in the 19th century highlights three important aspects of regional development. The first aspect is that causality was not unilinear. Industrialisation reinforced strong local specialisms and allegiances rather than generating the wider integrated regional economies and identities seen in other industrialising areas. The second aspect is the importance of scale. There was no preordained size for a region: coherent economic and cultural units in the East Midlands operated at a more localised level. The third aspect is the significance of temporal continuity, seen in the persistent centring of economy, social cohesion, and identity onto established urban centres, despite the coalescing forces unleashed by industrial and technological change.